Determining a technology’s value is integral to an exit strategy for medical device startup. Medical device companies can attract investors and secure acquisition and merger opportunities with medical device valuation which is a triangulation of market projections, private company comparable analysis, public company comparable analysis and modified discounted cash flow analysis.
Successful developers achieve the highest return on investment with early and extensive exit planning. This planning helps in identifying potential merger and acquisition targets. Early planning enables the company to go a long way in the right direction. A smart medical device developer works with a medical device consulting firm that creates multiple strategies on multiple fronts for success. Consulting firms create marketing strategies, commercialization strategies, business plans, competitive research and analysis strategy, intellectual property strategy and medical device exit strategies. These strategies run in parallel with the aim of developing a medical device that has the potential to reduce healthcare costs, improve healthcare outcomes and deliver the highest return on investment.
Intellectual property strategy and business exit strategy are two critical strategies having a heavy influence on one another.
The Influence of Medical Device Exit Strategy
There is an expression in the medical device industry and other industries – “always start with the end in mind”. This is the reason why every accomplished medical device innovator has an idea of its future exit strategy. Creating an exit strategy plan when the technology is in the early stage is critical to company growth. It has an influence on the way the company allocates money, time and resources. Planning exit for medical device start up in the early stages also has an impact on the way the company protects and secures future intellectual property rights.
Each new medical innovation has a target market that has some expectations from that innovation. Physicians expect a new medical device to reduce costs and improve treatment without any significant changes in their workflows. They want devices with enhanced usability, accuracy and efficiency. A medical device company invests in research and development to make a new medical device or contribute to an existing device. It is critical for a medical device developer to secure intellectual property rights.
Many medical device companies choose an intellectual protection route that is aligned with their business goals. The planned exit for a medical device start-up influences its intellectual property strategy. A company can achieve the expected business exit outcomes by using IP assets as a tool.
Role of Intellectual Property Strategy in Common Exit Strategies
If a medical device company has a long-term business plan, it requires intellectual property rights for its innovative medical devices. It requires comprehensive and focused IP rights to get a competitive advantage in the market. IP rights keep the company’s competitors from making unlawful copies of its medical innovation. As the company does not plan to wind down its operations in the near future, it can achieve a worthwhile return on its investment in intellectual property rights.
Medical device developers that have exit plans have some other considerations. For example, if a small medical device company has decided to be acquired by a larger company that makes more specialized medical devices, developing an IP portfolio makes the small company an attractive acquisition target.
Medical device market analysis, competitive analysis, business plan, risk analysis, commercialization analysis, positioning analysis, financial valuation, exit strategy, IP strategy and all other strategies determine the level of success a medical device company can achieve in a competitive landscape.
Creating these strategies requires business intelligence and data that delivers an understanding of the current and future markets. Medical device consulting firms have these resources to offer a full suite of strategic medical device consulting services. However, it is critical for a medical device company to choose a medical device consulting company that understands the business goals and objectives of its client. An innovator invests resources in research and development to develop a device that can secure the highest return on investment. The innovator can achieve this with the help of a medical device consulting firm.